He says it's pretty simple. A retina display would make the iPad Mini cost much more, decrease its battery life, make its form factor fatter, and the whole thing heavier.

Arment:

This isn’t theoretical: we can see the cost of Retina for ourselves with the iPads 3 and 4. The iPad 3 was the first Retina iPad and showed us the initial issues, and the iPad 4 shows us the best Retina iPad that Apple could ship with the technological improvements available since the iPad 3.

We can see that a Retina iPad screen is a much bigger power hog than a non-Retina screen of the same size. That’s why the iPad 3 needed to be thicker and heavier than the iPad 2, and why it takes so long to charge: the battery is huge. The iPad 4 has roughly the same size, weight, and battery as the iPad 3, so we know that technological progress hasn’t been able to meaningfully shrink it yet.

And we can see that pushing four times the pixels needs four times the GPU power to keep performance similar to the non-Retina equivalent, especially in games. To achieve this, the iPad 3’s A5X needed to be inelegant: it was physically huge, it drew a lot of power, and it ran noticeably warm even under routine tasks like web browsing. The iPad 4 was able to improve significantly with the much faster, die-shrunk A6X, but its GPUs still need a lot of power and it still runs warm.